Friday, March 17, 2006


Late Fees

Late fees need to be written in the lease agreement. I highly recommend that you charge a late fee. Your late fees have to reasonable to be enforceable. If you live in Chicago, and you are not a live-in landlord of a 2-6 unit building, then your late fee is determined by the Residential Landlord Tenant Ordinance (RLTO). The RLTO allows for a late fee of $10 for the first $500 in rent and 5% of anything over $500. If your rent is $1000 dollars a month you can charge a late fee of $35.
$1000 - $500 = $500, late fee of $10 for the first $500 and the second $500 X 5%= $25, so you add the $10 + $25 = $35 total late fee.
If your monthly rent is only $300 a month you can still charge a late fee of $10. If you are a small live-in landlord not covered by the RLTO you should still be careful to charge a reasonable late fee. I recommend $25.
Most municipalities have rules regarding tenants and landlords. You should check with your local government to see what rules you need to follow. It is your responsibility to know what the local laws are. Remember ignorance of the law is no excuse. Beware, most courts and local governments favor tenants over landlords and if you write the lease and it is unclear or contradictory, a judge will favor the other party.

Friday, March 10, 2006


Bounced Checks

Regrettably almost everyone has bounced a check. When dealing with tenants and getting your rent I recommend setting a few ground rules and sticking to them. First, your lease should state any bounced check fee that you may charge. I recommend $25, though I have seen higher fees. Your fee should not be outrageous. If rent is $1000 a month you cannot charge a bounce check fee of $500. That really is un-enforceable. However, if you charge a late fee, and the bouncing of the check happens after the late fee is due, you can charge a late fee plus the bouncing fee. One of my tenants bounced recently and ended up paying $50 in fees.
It is very important that you enforce any fees in your lease agreement and that you enforce them in a regular and equal manner with all your tenants. If you do agree to waive a fee make sure that it is clear that this is a onetime exemption and will not be repeated for any reason. If your tenant is covering a bounced rent check you must get the rent in cash or a money order. Do not take another check. The company I worked for had a rule that after you bounced two checks you would never be able to pay with a check again. It always had to be guaranteed funds after that. Unfortunately some people have a pattern of always bouncing checks. Make sure you have rules and limits and that they are written in the lease agreement.

Monday, March 06, 2006



My experience with tenants is they don't always give reliable information when it comes to repairs in their apartments. I have gotten several calls about no power or water and it turns out the whole neighborhood is down. I ask lots of questions of my tenants. Like, did you look outside first, are there street lights on, have you paid your bill? My other favorite is breakers. Anything that is electric or has some electric power can be affected by breakers. One of my clients went without AC for two weeks last summer before I suggested she try her breakers. That solved the problem. It is surprising but many modern day conveniences like central air and dishwashers have a switch, like a light switch, that provide the power. I had another client last summer who did not have AC because someone accidentally turned off a switch in her ceiling that happened to power the AC, that took a month to figure out. Who knew?
The best thing to do when dealing with a tenant repair is ask all the question you can think of and rule out the simplest solutions first. I also recommend try to check on the problem yourself first, before you call out a professional. Unfortunately most professional repair people have no problem charging $75 to flip a switch or a breaker.

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